dynamic of promotions and their importance in the...

1© GfK 2015 | Source: GfK Consumer panel services

DYNAMIC OF PROMOTIONS AND THEIR IMPORTANCE IN THE CATEGORY MANAGEMENT

Vesela Kalchishkova / Client Service DirectorGfK Consumer panel services


A trend of increasing household spending for FMCG products

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-1,3-1,7 -1,7

-1,9 -2,1-2,4 -2,4

-2,8 -2,9

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2,1 2,12,3 2,4

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Household expenditures (YOY change in %)

Till roll based


Increased HH expenditures driven by a raise in spent per trip and more often made purchase acts2014 vs 2013

HH spendings Till RollChange rate in %

4,1

Number of HouseholdsChange rate in %

~

Spend per buyer (BGN)Change rate in %

4,1

Purchase trip per buyerChange rate in %

1,5

Spend per trip (BGN)Change rate in %

2,5

Influencing factors for

FMCGdevelopment

9,95 in 20149,71 in 2013 282 in 2014278 in 2013

3 mln in 20143 mln in 20132 803 in 20142 694 in 2013


-1%

DEFLATION+2,4%

AVERAGE PAID PRICE CHANGE

UP TRADING

+3,5%

Bulgarian households tend to purchase higher price positioned Food and Soft drinks products 2014 vs 2013


-3% -6%4%

-8%Volume change

3% 1% 5% 2%-4%

4,9% 4,3% 4,0% 3,5%

0,3%-1,3%

-3,9%-5,0% -5,5%

Change in spent money and bought quantities2014 vs 2013

Sweet& Snacks

Personal care

Convenience Fabric& Home care

Diary products

Meat productsEdible fats Frozen foods

Volume change

v.s.Increased value Decreased value

Hot & Coldbeverages


42%48%

53% 54% 56% 58%

58% 52% 47% 46% 44% 42%

16%21%

26% 28% 31% 32%

2009 2010 2011 2012 2013 2014

Traditional trade

Modern trade

International retailers

FMCG Trade development

Value share %


2014 Promotion shares in Value2014 vs. 2013

51%

32%

28%29% 11% 17% 8%

Czech Rep.

Austria

HungaryCroatia Serbia Bulgaria Turkey

39%

Slovakia

20%

10%

20%

Poland

Russia

Romania

+3pp

+1pp

+9pp +3pp +7pp

+5pp

+3pp

+3pp

+1pp

+0pp

+1pp

10%


Promotion dynamic in Bulgaria

Share of spent money on promotion2013

10%201417%

20129%

201110%

20107%

20094%

Purchase acts per buyer on promotions 2013

302014

45201231

201130

201024

200916

Share of households buying on promotion2013

92%201492%

201289%

201181%

201078%

200968%


Share of spent money on promotion by type of store

20% Hypermarkets

15% Discounters

6% Minimarkets

2013

2% Small grocery

2014

36% Hypermarkets

28% Discounters

25% Supermarkets

20% Cash&Carry

10% Minimarkets

3% Small grocery

15% Supermarkets

15% Cash&Carry


Share of spent money on promotion by product group

30% Edible Fats

25% Frozen food

2014

17% Dairy products

20% Meat products

20% Hot & Cold Beverages

17% Convenience

18% Personal Care

9% Fabric & home care

4% Sweet & Snacks


Main brands with highest value and promo shares

59

52

35

27

28

33

29

57

48

45

27

38

37

33

Tchibo

Lavazza

Nescafe

Jacobs

Dove

Garnier

Nivea

18% 19%

22% 27%

38% 35%

13% 16%

12% 11%

15

9

4

4

37

18

32

28

31

30

45

28

Madjarov

Parshevitsa

Bony

KFM

Pepsi

Astika

19% 19%

3% 4%

4% 5%

Loyalty value share 2013 2014Promo value share2013

20132014

8% 7%

11% 11%

22% 20%

4% 5%

3% 4%


Promo*Evaluator (PEV)How promotions change the purchase behavior of the brand buyers

3313

11

83966213

1,773

5,4021

5496

27

11

896411,53

5,402 15

4

2005

2007

2009

2011

2013

2015

2017 5

99

15

25

15

45

5

105

349

27

1,533

5,402

1

© GfK 2015 | Source: Consumer panel Services 13

Promotion How sustainable is a promotion?

What is the mid- to long-term impact of promotions on the brand value?

Business questions

What is impact of promotion

What are the effects of different promotion types (overfill, give-away items,…)?

Effect of different type of promotion

How successful are the promotion campaigns in comparison to the competition’s?

Comparison with competitors

Buyer groups Among which buyer groups is a promotion successful?

What profile do the buyers of my promotion have?Buyers profile

Am I educating the buyers of my brand to simply wait for the next promotion, and in the meantime not to buy my brand at the regular price?Behavior change

© GfK 2015 | Source: Consumer panel Services 14

WhatProducts buyers are

buying?

WhenWas the brand purchased - before, during or after

promotion?

WhoIs buying?

?

GfK Promo evaluator (PEV)How promotions change the purchase behavior of the brand buyers

WhereBrand buyers have gone after the

promotion campaign?

© GfK 2015/ Source: Consumer panel services 15

Where is the buyer coming from?

Where is the buyer going to?

Before purchase: After purchase:

Promo*Evaluator (PEV) - Method

Promotion:

Brand

Brand at regular price

Brand on promotion

Competitor brand

Competitor brand

LoyaltyBonus

Brand Investment

Defendedmarketshare

Brand Erosion

Fast Euro

Reward for loyal buyers, waste ofmoney? Purchases would have beenmade also w/o promo

Sustainable win of buyers:they come to the brand on Promotion and keep on buying it

Buyers who buy the brand alwayson promotion – wait for a promo? „bought loyalty“

Brand damage – promos lead to brand erosion in the long-term

Promotions draw market share fromcompetition – short term quick winsPr

omot

ionCompetitor

brand


Brand on promotion

Competitor brand


16© GfK 2015 | Source: Consumer panel services

Brand X promos defend market share and attack competition but cause brand erosion in the long-run.

Competitive Relevance:= Fast Euro + Defended market share - Loyalty Bonus

30%

9%

34%

12%

16% Brand Investment

Loyalty Bonus

Defended Market Share

Fast Euro

Brand Erosion

Purchase acts %

Short term effect+ 31%

Long term effect- 14%

Brand Value:= Brand Investment - Brand Erosion


Brand X promo health structure at different retailer

24% 29% 25%33% 36%

7%9%

8%2%

8%

52%26%

19%

39%

40%

1%

10%19%

12%

7%17%

27% 30%15% 9%

Brand Investment

Loyalty Bonus

Defended Market Share

Fast Euro

Brand Erosion

Purchase Acts %

Retailer 1 Retailer 2 Retailer 3 Retailer 4 Retailer 5

Brand Erosion at almost all retailers! Worst situation at retailer 4 and 5. Exception is retailer 3 with relative high shareof brand investment and loyalty bonus.


GfK Shopper Insight Monitor (SimIT): Evaluate the performance and potential of Category/brand in different retailers

3313

11

83966213

1,773

5,4021

5496

27

11

896411,53

5,402 15

4

2005

2007

2009

2011

2013

2015

2017 5

99

15

25

15

45

5

105

349

27

1,533

5,402

1


Whydo the retailers not exploit the potential adequate?

Wheredoes not exploited potential

of a retailer go to?

Whatis the potential a category offers to different retailers?

Howdo the retailers exploit this category potential?

Whoаre the loyal/not loyal

buyers?

?

GfK Shopper Insight Monitor (SimIT)Evaluate the performance of category/ brand in different retailers


503 320

433 524

377 494

294 092

263 042

614 151

Kaufland

Lidl

Billa

Penny

CBA

Traditional trade

Actual turnover in %Value potential exploitation

Hot & Cold Beverages performance within main Key Accounts2014

Potential turnover(000 BGN)

19

8

10

9

13

36

Kaufland

Lidl

Billa

Penny

CBA

Traditional trade


Lidl Hot&Cold bevarege unused potetial has gone to….2014


23 755

17 620

14 027

11 733

27 491

Kaufland

Billa

Penny

CBA

Traditional trade

Actual turnover in %Value potential exploitation

Potential turnover(000 BGN)

21

8

7

13

45

Kaufland

Billa

Penny

CBA

Traditional trade

Kamenitza performance within main Key Accounts2014


Manufactures and retailers go after the same shoppers2 points of view

Retailer perspectiveHow does my Account perform compared to other retailers for a certain category?For what categories I have still open potential at my Account?Which brands I need to focus on? What Brand has a high potenial but low VPE?

Manufacturer perspectiveAt which Account my category/brand has still open potential? At which Account value potential exploitation (VPE) is low for my category/brand? How is VPE of my brand compared to competitors at one retailer?Show retailers open potential at annual performance reviews.

1

2


Key Findings & Summary

Modern trade is still growing in Bulgaria and has already reached 58% market share in value. Promotions are

coming more and more important with verysignificant growth in 2014. But we can’t

increase sales only with promotions, because our brand will devaluate.

Good management of promotions is crucial for our success. We have to know the effect of our promotions and clients behavior -before, during and after promotion.

Knowing category and brand potential on the market can help us to build right strategy for turnover increment.

Presenter

Presentation Notes

Positive signs for Bulkagaria economy recovery


GfK. Growth from Knowledge

Vesela Kalchishkova / Client Service DirectorGfK Consumer panel services

dynamic of promotions and their importance in the...

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